Mammalian carbonic anhydrase isozyme III possesses both carbon dioxide hydratase and esterase activities, a characteristic of all seven of the known isozymes of carbonic anhydrase. However, isozyme III is unique in also demonstrating phosphatase activity, of a type which was recently shown to fall into the class of the dual-specificity protein phosphotyrosyl phosphatases. Biochemical studies also showed that glutathiolation was involved in the reversible regulation of this phosphotyrosyl phosphatase activity. Glutathiolation of Cys-186 is required for phosphatase activity while that of Cys-181 blocks activity. The gene for rat liver carbonic anhydrase III was obtained by PCR cloning. The protein was successfully overexpressed in Escherichia coli. The specific activity of the purified enzyme was the same as the rat enzyme for both carbon dioxide hydratase and esterase activities. However, no phosphatase activity was detectable. Thus, the protein was expressed in insect Sf9 cells utilizing a baculovirus vector. At present, levels of expression are relatively low, and it is not yet known if phosphatase activity is associated with the recombinant product. When catalytically active recombinant protein becomes available, we will utilize site-specific mutants to assist in understanding the molecular basis for phosphatase activity and its regulation by glutathiolation.